Aurelia Butler

The writer is director of Chatham House, a think-tankA police mugshot of Donald Trump © Fulton County Sheriff’s Office/AFP/Getty ImagesOf the two startling images that circled the globe last week, only one should prompt a foreign policy rethink for the UK and its allies. It is not the flaming wreckage of Yevgeny Prigozhin’s plane near Moscow. The dramatic death of the leader of the Wagner group, widely predicted since his attempted mutiny against Vladimir Putin in June, told us nothing new. This assumed demonstration of theatrical brutality only strengthens Ukraine’s resolve in the fight against Putin.It is the police mugshot of Donald Trump that deserves more thought. Carefully posed (he chose to glower rather than smile under the combed sweep of his hair) and immediately circulated by his team as a symbol of his supposed martyrdom, it drove his poll ratings only higher. The image will dominate next year’s presidential campaign (in which he holds the overwhelming lead for the Republican nomination). US District Judge Tanya Chutkan on Monday set a start date of March 4 2024 for his federal criminal trial on charges of alleged election interference, one day before “Super Tuesday”, when Republican voters in more than a dozen states head to the polls to pick their nominee.British foreign policy, like that in much of Europe and many democracies beyond, is based on the presumption that the US in some sense always remains the same. Its presidents, its policies, its wars of choice come and go. But America upholds the principle of international institutions even if it rails against some of them or funds them sporadically. It continues to pick up the giant’s share of the tab for Nato, above all.Those assumptions are confounded if Donald Trump is elected again. His critics say that surely he would not win more support than in 2016, but President Joe Biden’s stumbles, literal and figurative, and the unpopularity of Kamala Harris as vice-president have left the Democrat vote vulnerable.The UK’s spring statement of its foreign policy — the awkwardly named Integrated Review Refresh — discusses potential policy changes that might follow the election, but does not do justice to the implications of Trump II. His policies would be disruptive enough, but many are shared by other presidential candidates. On Ukraine, Trump has talked of “ending the war to stop the killings” and Ron DeSantis, the next closest contender, has been sceptical of continued US support. The US has supplied more equipment to Ukraine than Europe combined; Kyiv would struggle to hold its own without Washington.On China, it is hard to know how Trump’s impetuosity while in office (he imposed harsh tariffs on Chinese exports) would respond to rising tension on Taiwan. But that goes for others, too; the sole instinct which Republicans and Democrats seem to share is antagonism towards Beijing.The former president’s stance on artificial intelligence is harder to discern. Rishi Sunak’s global AI summit in early November is intended to show UK leadership on governance of the technology. That depends, however, on co-operation from the US, home to many of the tech giants. It is hard to deduce support for corporate regulation from Trump’s first term (or his fury at the legal cases against his companies).But these are just awkward policies — and the UK has not found the current administration easy on that front either. Biden ordered the precipitate exit from Afghanistan which upended 20 years of British efforts in that country. The Inflation Reduction Act, a subsidy of hundreds of billions of dollars for green technology, has been drawn up with blithe disregard for the way it will suck investment and manufacturing from US allies.Dealing with Trump in the White House again would present problems on a different scale. In a second term, he would be a president who had denied the result of one election and rejected the legal process of being held to account for that. He would have an utterly different conception of America’s role in the world and the nature of its democracy at home, of the rule of law at home and abroad. And so would the US voters who elected him.At that point, the US becomes, for its allies, a different country altogether. The implications for global institutions, for international law and order, for predictability of a world superpower are stark. That they are barely discussed in published foreign policy is perhaps because of concern about jeopardising current relationships. But the prospect of the US being led by a president who denies the principles of American democracy is likely enough that this is no longer a good excuse. More

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INEGI last month estimated that gross domestic product (GDP) increased by 0.9% in the April to June period. Analysts polled by Refinitiv expected the final figures would show the economy expanding by 1.0% over the quarter.A breakdown of the GDP figures showed the important tertiary or services sector grew 0.7%, below the 1% initially estimated.Primary activities such as farming, fishing and mining increased 0.7% quarter-on-quarter, undershooting the preliminary data by a tenth of a percentage point.Secondary activities, which cover manufacturing, grew by 1.2%, beating the preliminary estimate of 0.8%, and pointing to buoyant construction demand.Pantheon Macroeconomics said the quarter overall contributed to a “solid” first half of the year, with the first quarter having recorded a downwardly revised gain of 0.8%. Yet it warned that a drop in momentum was likely.”Robust fundamentals, including a resilient labor market and falling inflation, are offsetting the drag from tighter financial conditions,” Andres Abadia, the chief Latin America economist at Pantheon, said in a note.However, he added that “tighter financial conditions and the weakness of key sectors … are now a clear drag,” pointing also to the impact of “global conditions” and interest rates.The Mexican central bank held interest rates steady again this month for a third time, with cuts not forecast by most analysts until later this year.The Mexican economy grew 3.6% in the second quarter on an annual basis, slightly below the preliminary estimate of 3.7%. More

WASHINGTON (Reuters) – Senior U.S. diplomat Victoria Nuland spoke on Tuesday with Pakistani Foreign Minister Jalil Abbas Jilani and discussed the importance of “timely, free and fair elections” in the South Asian nation, the U.S. State Department said.”Acting Deputy Secretary Nuland and Foreign Minister Jilani discussed the importance of timely, free and fair elections in a manner consistent with Pakistan’s laws and constitution,” the U.S. State Department said in a statement.Pakistani politics has been in a crisis for over a year, with former Prime Minister Imran Khan – who was ousted in a parliamentary vote of no confidence last year – being at the center of it.Khan blamed the United States and Pakistan’s military for his ousting. Both Washington and the military have denied his claims. The State Department statement on the call between Nuland and Jilani made no mention of Khan.A Pakistani high court on Tuesday suspended the jailed former prime minister’s sentence on corruption charges, but he will remain behind bars as a judge had already ordered his detention in another case. The conviction of Khan, who remains Pakistan’s most popular leader according to opinion polls, has also barred him from contesting elections for five years.Pakistan swore in a caretaker cabinet under interim Prime Minister Anwaar-ul-Haq Kakar in mid-August, tasking it with running the country until fresh elections, which may be delayed beyond November as constituency boundaries are redrawn.The caretaker cabinet’s top job will be to lead Pakistan towards economic stabilization, with the $350 billion economy treading a narrow recovery path after getting a last-minute $3 billion bailout deal from the International Monetary Fund (IMF), averting a sovereign debt default.The election commission earlier this month said new constituencies based on the latest census would be finalized by Dec. 14. After that, the commission will confirm an election date.Political analysts said that if the caretaker set-up stretches beyond its constitutional tenure, a prolonged period without an elected government would allow the military, which has ruled directly for more than three decades of the country’s 76-year existence, to consolidate control.Nuland and Jilani also discussed Pakistan’s economic stability and continued engagement with the IMF, the State Department said. More

LONDON (Reuters) – Companies around the world are on track to pay investors a record $1.64 trillion in dividends this year following a more than 6% jump in the second quarter, a report on Wednesday showed. The figures by fund manager Janus Henderson estimated that 88% of companies globally had either increased their dividends or held them steady in Q2, resulting in $568.1 billion worth of worldwide payouts since the start of the year.The fastest growth came in Europe, where a number of countries such Italy and Spain have introduced or are looking at windfall taxes on bumper profits made by banks and energy firms on the back of rising interest rates and energy prices. Dividends were up nearly 10% to $184.5 billion. That did not including Britain, where the quarterly total dropped to $30.7 billion from last year’s $34.9 billion, when oil and gas firms saw a leap in payments after Russia’s invasion of Ukraine sent commodity prices surging.This time around, the surge in global interest rates meant banks contributed half the world’s dividend growth and drove a quarter of Europe’s increase. At the same time, U.S. dividend growth slowed for the sixth consecutive quarter.”We do expect dividend growth to continue,” Ben Lofthouse, Head of Global Equity income at Janus Henderson said, adding that the banking sector was expected to continue to fuel it for the rest of the year despite waning economic momentum. “A weaker economic environment is typically negative for banks,” Lofthouse said. “But the positive effect on bank margins from the end of years of ultra-low interest rates is very powerful and is driving dividend payouts”.The slowdown in U.S. dividend growth left the region’s total at $148 billion, up 4.6% year-on-year on an underlying basis once lower one-off special dividends were taken into account.That was “still a creditable increase” the report said adding that 98% of the U.S. companies tracked either raised payouts or held them steady, which was well above the global average.Healthcare companies helped the growth, led by UnitedHealth Group (NYSE:UNH) and Eli Lilly (NYSE:LLY), both of which have posted strong profits and raised guidance for the rest of the year. Despite the current concerns about the U.S. commercial and residential property market, real estate companies came a close second, with warehouse and logistics property specialist Prologis (NYSE:PLD) out in front.The biggest dividend cuts, meanwhile, were from chipmaker and tech firm Intel (NASDAQ:INTC) following a fall in its sales, and Blackstone (NYSE:BX), which has suffered a dramatic drop in profits on the back of lower private asset valuations. In Asia the picture was mixed. The second quarter marks a seasonal high point for Japanese dividends and payouts there rose 8.4% on an underlying basis. More than half of Japanese companies tracked delivered double-digit growth. Its largest dividend payer, carmaker Toyota, accounted for one third of the underlying increase with a 25% hike, despite lower profits. In China, however, the majority of companies cut payouts in what is a seasonally low-paying quarter there. Chinese dividends fell 12.4% on an underlying basis reflecting 2022’s extended COVID-19 lockdowns, more than offsetting a large increase from internet giant Tencent. Emerging market banks, meanwhile, raised payouts by half year-on-year although their impact was offset by much lower oil dividends, chiefly in Brazil and Colombia.Brazil’s big oil firm Petrobras slashed its payout. Having been the world’s largest payer in 2022, it also made the world’s biggest dividend cut in Q2. More

LONDON (Reuters) – The number of house purchases in Britain this year is on course to drop by 21% to its lowest since 2012 as a result of rising borrowing costs, property website Zoopla forecast on Wednesday.Zoopla forecast there would be 1.0 million residential housing sales this year, down from 1.26 million last year and a 14-year high of 1.48 million in 2021, when ultra-low interest rates and pandemic tax incentives boosted demand.”While UK house prices are 0.1% higher over the year, it is the number of sales that have been hit hardest by higher borrowing costs, especially amongst mortgage-reliant buyers,” Zoopla’s executive director, Richard Donnell, said.Zoopla forecast that house purchases funded by mortgages would drop 28% this year, while cash buyers would fall just 1% and account for more than a third of sales. The most recent official data showed that there were 22% fewer house purchases in the three months to the end of June than a year earlier.Average house prices in May were down 2% from their peak last September, but were still more than 20% higher than before the start of the COVID-19 pandemic, when cheap finance and demand for more spacious homes drove a surge in prices in many Western countries.Since December 2021, the BoE has raised interest rates 14 times to 5.25% – their highest since 2008 – from 0.1% in a bid to tackle rampant inflation, and markets expect two further rate rises to 5.75% this year.The BoE is due to release July mortgage lending data at 0830 GMT.Zoopla provides property valuations and also advertises more than 1 million properties for sale or to rent. More